<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q
(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997

OR

[_]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM             TO

                       COMMISSION FILE NUMBER  333-21411

                              ROSE HILLS COMPANY

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

              DELAWARE                                        13-3915765
   (STATE OR OTHER JURISDICTION OF                        (I.R.S. EMPLOYER
    INCORPORATION OR ORGANIZATION)                       IDENTIFICATION NO.)

                         3888 SOUTH WORKMAN MILL ROAD
                          WHITTIER, CALIFORNIA 90601

              (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

                                (562)  692-1212

               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

                                      N/A

   (FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
                                    REPORT)

Indicate by check [X] whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [_]



The number of outstanding Common shares as of November 12, 1997, was 1,000
<PAGE>
 
                              ROSE HILLS COMPANY
                               AND SUBSIDIARIES

<TABLE> 
<CAPTION> 
                                                                                  PAGE
<S>                                                                              <C> 
PART I. FINANCIAL INFORMATION

     ITEM 1.  FINANCIAL STATEMENTS:
 
       CONSOLIDATED BALANCE SHEETS
          as of September 30, 1997 and December 31, 1996                            1
 
       CONSOLIDATED STATEMENTS OF OPERATIONS
          for the Three and Nine Months Ended September 30, 1997 and 1996           2
 
       CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
          for the Nine Months Ended September 30, 1997                              3
 
       CONSOLIDATED STATEMENTS OF CASH FLOWS
          for the Nine Months Ended September 30, 1997 and 1996                     4
 
       NOTES TO INTERIM CONSOLIDATED FINANCIAL STATEMENTS                           5
 
     ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS
       OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                             6
 
PART II.
 
     OTHER INFORMATION
 
     ITEM 5     OTHER INFORMATION                                                  10
 
     ITEM 6     EXHIBITS AND REPORTS ON FORM 8-K                                   10
 
       SIGNATURES                                                                  10
 
     INDEX OF EXHIBITS                                                           10 - 11
 
     EXHIBIT 12                                                                    12
 
     EXHIBIT 27                                                                    13
 
</TABLE>
<PAGE>
 
                      ROSE HILLS COMPANY AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                AS OF DECEMBER 31, 1996 AND SEPTEMBER 30, 1997
                            (DOLLARS IN THOUSANDS)


                                    
<TABLE>
<CAPTION>
                                    ASSETS 
                                                                                  1996        1997     
                                                                                --------   ----------- 
                                                                                           (Unaudited) 
<S>                                                                             <C>        <C>         
Current assets:                                                                            

   Cash and equivalents                                                         $  7,900     $  2,045  
   Accounts receivable, net of allowances                                          8,344        8,979  
   Prepaid expenses and other current assets                                       2,666        3,818  
   Inventory                                                                       1,186        1,152  
   Deferred tax asset                                                              1,176        1,176  
                                                                                --------     --------  
      Total current assets                                                        21,272       17,170  
                                                                                --------     --------  
   Long-term receivables, net of allowances                                        5,153        7,214  
   Cemetery Property                                                              71,389       69,517  
   Property, plant and equipment, net                                             73,283       73,308  
   Goodwill                                                                      129,294      128,542  
   Deferred finance charge                                                        11,891       10,718  
   Other assets                                                                    5,552        5,890  
                                                                                --------     --------  
      Total assets                                                              $317,834     $312,359  
                                                                                ========     ========   
 
                      LIABILITIES AND STOCKHOLDER'S EQUITY
 
Current liabilities:
   Accounts payable and accrued expenses                                        $  2,383     $  1,945  
   Accrued expenses                                                                7,857        3,572  
   Accrued interest                                                                1,815        3,347  
   Other current liabilities                                                       1,487        1,212  
   Current portion of other long-term debt                                         1,968        1,494  
                                                                                --------     --------  
      Total current liabilities                                                   15,510       11,570  
                                                                                --------     --------  
   Retirement plan liabilities                                                     7,616        7,284  
   Deferred tax liability                                                          4,373        4,373  
   Subordinated Notes Payable                                                     80,000       80,000  
   Bank senior term loan                                                          74,000       73,000  
   Other long-term debt                                                            3,764        3,511  
   Other liabilities                                                               3,545        4,115  
                                                                                --------     --------  
      Total liabilities                                                          188,808      183,853  
                                                                                --------     --------  
Commitment and contingencies                                                                           
Stockholder's equity:                                                                                  
   Common stock par value $.01; 1,000 authorized; 1,000 shares outstanding                             
      Additional paid in capital                                                 129,554      129,554  
      Accumulated earnings (deficit)                                                (528)      (1,048) 
                                                                                --------     --------  
      Total stockholder's equity                                                 129,026      128,506  
                                                                                --------     --------  
   Total liabilities and stockholder's equity                                   $317,834     $312,359  
                                                                                ========     ========   
 
</TABLE>
     See accompanying notes to unaudited consolidated financial statements.

                                      (1)
<PAGE>
 
                      ROSE HILLS COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
                                        

<TABLE>
<CAPTION>
                                                     Three Months Ended         Nine Months Ended         
                                                        September 30               September 30           
                                                           1996       1997           1996        1997     
                                                    Predecessor    Company    Predecessor     Company     
                                                    ------------   --------   ------------   --------     
<S>                                                 <C>            <C>        <C>            <C>          
Sales and services:                                                                                       
   Funeral sales and services                           $ 5,004    $ 6,159        $15,065    $ 21,235     
   Cemetery sales and services                            6,488      8,706         17,798      25,938      
   Insurance commissions and other                        1,242      1,934          3,632       5,492      
                                                        -------    -------        -------    --------      
      Total sales and services                           12,734     16,799         36,495      52,665      
   Cost of sales and services:                                                                             
   Funeral sales and services                             1,509      1,488          4,674       5,029      
   Cemetery sales and services                            1,090      2,507          3,295       6,367      
                                                        -------    -------        -------    --------      
      Total costs of sales and services                   2,599      3,995          7,969      11,396      
   Gross profit                                          10,135     12,804         28,526      41,269      
   Selling, general and administrative expenses           7,393      9,194         21,763      27,081      
   Amortization of purchase price in excess of                                                                        
    net assets acquired and other intangibles                46        819             85       2,459      
                                                        -------    -------        -------    --------      
   Income from operations                                 2,696      2,791          6,678      11,729      
Other income expense:                                                                                      
   Interest expense                                        (506)    (4,404)        (1,415)    (12,417)     
   Other income                                             (66)       245            309         478      
                                                        -------    -------        -------    --------      
      Total other income expense                           (572)    (4,159)        (1,106)    (11,939)     
   Income (loss) before income tax                        2,124     (1,368)         5,572        (210)     
   Provision for income tax (benefit)                       503       (241)         1,150         310      
                                                        -------    -------        -------    --------      
   Net income (loss)                                    $ 1,621    $(1,127)       $ 4,422    $   (520)     
                                                        =======    =======        =======    ========      
</TABLE>



     See accompanying notes to unaudited consolidated financial statements.

                                      (2)
<PAGE>
 
                      ROSE HILLS COMPANY AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                  (UNAUDITED)
<TABLE>
<CAPTION>
 
                                                                                        Nine Months      Nine Months
                                                                                           Ended           Ended
                                                                                        September 30     September 30
                                                                                            1996            1997
                                                                                        Predecessor        Company
                                                                                        ------------     ------------
<S>                                                                                     <C>              <C>       
Cash flow from operating activities:                                                                                
   Net income (loss)                                                                        $ 4,422        $  (520) 
Adjustments to reconcile net income to net cash provided by operating activities:                                   
   Amortization of purchase related assets                                                       85          2,459  
   Provision for deferred taxes                                                                                     
   Depreciation                                                                               2,118          1,546  
Changes in assets and liabilities associated with operating activities:                                             
   (Increase) decrease in customer accounts receivable                                          750         (2,696) 
   Decrease in inventories                                                                      489          1,906  
   (Increase) decrease in other current assets                                               (1,226)        (1,706) 
   Decrease in accounts payable and accrued expenses                                           (578)        (3,191) 
   Increase (decrease) in other current liabilities                                           1,324           (749) 
   Other, net                                                                                  (395)         1,411  
                                                                                            -------        -------  
   Net cash provided by (used in) operating activities                                        6,989         (1,540) 
   Cash flow from investing activities--capital expenditures                                 (2,208)        (1,491) 
   Cash flow from investing activities--goodwill addition                                        --         (1,571) 
   Cash flow from financing activities--Reduction in long-term debt                          (2,135)        (1,253) 
                                                                                            -------        -------  
   Net increase (decrease) in cash and cash equivalents                                       2,646         (5,855) 
   Adjustments for exclusion of cash and cash equivalents pursuant to                                               
       the asset purchase agreement.                                                         (3,465)            --  
   Cash and cash equivalents at beginning of period                                           1,269          7,900  
                                                                                            -------        -------  
      Cash and cash equivalents at end of period                                            $   450        $ 2,045  
                                                                                            =======        =======  
                                                                                                                    
Supplemental cash flow information:                                                                                 
   Interest paid                                                                              1,415          8,754  
   Taxes paid                                                                                   405            449   
 
</TABLE>



     See accompanying notes to unaudited consolidated financial statements.



                                      (3)
<PAGE>
 
                      ROSE HILLS COMPANY AND SUBSIDIARIES

                CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                 FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
               (DOLLARS IN THOUSANDS, EXCEPT SHARES OUTSTANDING)


<TABLE>
<CAPTION>
 
 
                                                                  (RETAINED
                                                                   EARNING          TOTAL
                                   SHARES        ADDITIONAL      ACCUMULATED    STOCKHOLDER'S
                                 OUTSTANDING   PAID IN CAPITAL     DEFICIT)         EQUITY
                                 -----------   ---------------   ------------   --------------
<S>                              <C>           <C>               <C>            <C>
Balance, December 31, 1996             1,000           129,554          (528)         129,026
   Net income (loss)                      --                            (520)            (520)
                                 -----------                          ------    -------------
Balance, September 30, 1997            1,000           129,554        (1,048)         128,506
                                 ===========           =======        ======    =============
 
</TABLE>





     See accompanying notes to unaudited consolidated financial statements.

                                      (4)
<PAGE>
 
                      ROSE HILLS COMPANY AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)


1.   BASIS OF PRESENTATION

     The accompanying September 30, 1997 interim consolidated financial
statements of Rose Hills Company and subsidiaries ("Company") have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting.  Accordingly, they do not include all of the information
and footnote disclosures necessary for complete financial statements in
conformity with generally accepted accounting principles.  These unaudited
consolidated financial statements should be read in conjunction with the audited
consolidated financial statements included in the Company's Registration
Statement on Form S-4 (Registrations No. 333-21411).

     In the opinion of management, the accompanying interim consolidated
financial statements contain all adjustments considered necessary for a fair
presentation of the financial condition as of September 30, 1997 and the results
of operations and cash flows for the three and nine months ended September 30,
1997.

     Earnings (loss) per share have not been included, as the Company is a
wholly owned subsidiary of Rose Hills Holding, Inc.

     The Company was formed in 1996 for purposes of acquiring Roses, Inc.
("Mortuary") and purchasing certain assets and assuming certain liabilities of
Rose Hills Memorial Park Association and Workman Mill Company ("Cemetery").
Also, in connection with the acquisition the Company's shareholder contributed
10 funeral homes and 2 funeral home cemetery combination properties ('Satellite
Properties').  As a result of these acquisitions (collectively "Acquisition
Transaction"), the Company is the successor to the operations of the predecessor
Mortuary and Cemetery.  As of November 19, 1996, the Company's assets and
liabilities were adjusted to their estimated fair values under purchase
accounting.  In addition, the Company entered into new financing arrangements
and changed its capital structure.  Accordingly, the financial position and
results of operations subsequent to November 18, 1996 are not comparable to
prior periods.  Operations of the Company since November 18, 1996 reflect
increased depreciation, amortization, and interest expense.  Accordingly,
comparative financial information as of and for the three and nine months ended
September 30, 1996 have been included on a historical basis for the predecessor
Mortuary and Cemetery and are not comparable.  Such combined financial data for
the predecessor operations has been included solely to facilitate a discussion
of the operations from period to period.  Such presentation of the 1996 data is
pro forma in that generally accepted accounting principles would not allow such
combination due to the lack of common ownership of the predecessor operations.
The operations of the Satellite Properties for 1996 have been omitted from the
presentation on the basis of immateriality.


2.   SETTLEMENT AGREEMENT

     In connection with the acquisition, Roses, Inc. entered into a "Settlement
Agreement" dated November 19, 1996 with the former owners of the Cemetery to
resolve amounts due/owed between Roses, Inc. and the Cemetery as of November 18,
1996.  The final resolution of such amounts under the Settlement Agreement had
not been determined at September 30, 1997.

     The Company, as successor to Roses, Inc., accrued a $1.6 million liability
to former owners of the Cemetery that it believes will fully satisfy the terms
of the Settlement Agreement.  The Company believes that the selling shareholders
of Roses, Inc. are obligated to pay approximately $1.4 million of the balance
accrued.  Upon final resolution of such amounts under the Settlement Agreement,
Goodwill will be adjusted accordingly.



                                      (5)
<PAGE>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS.

OVERVIEW

The Company  was formed in 1996 to acquire Rose Hills Memorial Park ("Rose
Hills"), which is the largest single location cemetery and funeral home
combination in the United States.  In addition the Company acquired the
Satellite Properties consisting of 10 funeral homes and two combination cemetery
and funeral home properties.  Rose Hills is situated less than 14 miles from
downtown Los Angeles on approximately 1,418 acres of permitted cemetery land
near Whittier, California.  The Cemetery and Mortuary have been continuously
operating since 1914 and 1956, respectively.  As a result of the Acquisition
Transaction the Company owns a strategic assembly of cemeteries and funeral
homes in the greater Los Angeles area.


RESULTS OF OPERATIONS
 
The following table sets forth certain income statement data as a percentage of
total sales for the Company and its predecessor operations.
<TABLE>
<CAPTION>
 
                                            THREE MONTHS ENDED         NINE MONTHS ENDED
                                                SEPTEMBER 30              SEPTEMBER 30
                                           1996           1997       1996           1997
                                           PREDECESSOR    COMPANY    PREDECESSOR    COMPANY
                                           ------------   --------   ------------   -------
<S>                                        <C>            <C>        <C>            <C>
Sales and services:
   Funeral sales and services                     39.3%      36.7%          41.3%     40.3%            
   Cemetery sales and services                    51.0%      51.8%          48.8%     49.3%            
   Insurance commissions and other                 9.8%      11.5%          10.0%     10.4%            
      Total sales and services                   100.0%     100.0%         100.0%    100.0%            
Gross profit:                                                                                          
   Funeral sales and services                     69.8%      75.8%          69.0%     76.3%            
   Cemetery sales and services                    83.2%      71.2%          81.5%     75.5%            
   Total gross profit                             79.6%      76.2%          78.2%     78.4%            
Selling, general and administrative               58.1%      54.7%          59.6%     51.4%            
 expenses                                                                                              
Amortization                                         0%       4.9%           0.0%      4.7%            
Interest expense                                   4.0%      26.2%           3.9%     23.6%             
 
</TABLE>
QUARTER ENDED SEPTEMBER 30, 1997 COMPARED TO SEPTEMBER 30, 1996

Revenues for the quarter ended September 30, 1997 increased 32 % to $16.8
million from $12.7 million for the quarter ended September 30, 1996.
Approximately 66% or $2.7 million of the increase was attributed to the
acquisition of the Satellite Properties.  The remainder of the increase was
attributed to an increase in pre-need cemetery property sales, increased
cemetery merchandise sales and increased earnings from the Endowment Care Fund
("ECF").  Pre-need property sales increased due to the expansion of products
offered on pre-need sales contracts and over 120 new sales counselors.  Overall
funeral service revenue increased due to the acquisition of the Satellite
Properties.  Revenue at Rose Hills was up slightly compared to 1996.  A five-
percent decline in total calls was partially offset by a price increase in
August 1996 in funeral services.



                                      (6)
<PAGE>
 
Gross margins from Cemetery sales declined from 83.2% in the quarter ended
September 30, 1996 to 71.2% in the quarter ended September 30, 1997.  The
decline was due to an overall increase in inventory costs (amortization)
associated with purchase accounting adjustments and group sale discounts.  Gross
margins for funeral services increased from 69.8% in the quarter ended September
30, 1996 to 75.8% in the quarter ended September 30, 1997 due to the price
increase and cost savings associated with the integration of the Satellite
Properties.

Selling, general and administrative expenses increased 24% from $7.4 million at
September 30, 1996 to $9.2 million at September 30, 1997.  The primary reason
for the increase is due to the acquisition of the Satellite Properties.  Costs
related to the Administrative Service Agreement with The Loewen Group, Inc. and
increased property taxes were offset by lower employee benefit costs and savings
related to staffing reductions.  As a percentage of net sales, selling, general
and administrative expense for the quarter ended September 30, 1997 declined
from 58.1% in the quarter ended September 30, 1996 to 54.7%. The decline is
attributed to the absorption of the Satellite Property operations within the
existing Company corporate infrastructure and additional leverage realized from
the increase in pre-need property sales.

Amortization and interest expense increased $.8 million and $3.9 million,
respectively, for the quarter ended September 30, 1997 compared to September 30,
1996.  Amortization, which includes amortization of goodwill and covenants not
to compete, increased as a result of the Acquisition Transaction.  Interest
expense also increased due to borrowings associated with the Acquisition
Transaction.

EBITDA, earnings before interest, taxes, depreciation and amortization
(including cemetery property amortization included in cost of sales), increased
to $5.1 million for the quarter ended September 30, 1997 from $4.5 million for
the quarter ended September 30, 1996.  The increase was primarily a result of
(i) an increase in pre-need contract sales (ii) an increase in leverage of
existing corporate overhead and (iii) the addition of the Satellite Properties.
EBITDA should not be considered in isolation, as a substitute for net income or
cash flow data prepared in accordance with generally accepted accounting
principles or as a measure of a company's profitability or liquidity.

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO SEPTEMBER 30, 1996

Consolidated revenues increased 44% to $52.7 million for the nine months ended
September 30, 1997 compared to $36.5 million for the nine months ended September
30, 1996.  Approximately half of the growth was attributed to the acquisition of
the Satellite Properties, which contributed $8.3 million to the increase.
Funeral service revenues increased 41% to $21.2 million, and cemetery revenues
increased 46% to $25.9 million. The increase in funeral service revenue was
largely due to the acquisition of the Satellite Properties.  Revenue from total
calls for Rose Hills is down 4% from the same nine-month period last year.
Cemetery sales increased due to an increase in pre-need property sales which
benefited from the expansion of products offered on pre-need contracts, one
large group sale for approximately $1.5 million and the addition of over 120 new
sales counselors and telemarketing support.

General and administrative expenses increased $5.3 million to $27.1 million for
the nine months ended September 30, 1997 from $21.8 million for the nine months
ended September 30, 1996.  The largest component of the $5.3 million increase is
associated with the acquisition of the Satellite Properties.  General and
administrative expense for the predecessor mortuary and cemetery was flat
compared to the prior period.  An increase in commission expense, which varies
in direct proportion with pre-need cemetery sales and services, of $2.4 million
was largely offset by a reduction in salaries and benefits.  As a percentage of
consolidated revenue, general and administrative expense decreased to 51.4% for
the nine months ended September 30, 1997 compared to 59.6% for the nine months
ended September 30, 1996. The decline is attributed to the absorption of the
Satellite Property operations within the existing Company corporate
infrastructure and additional leverage realized from the increase in pre-need
property sales.

Other revenues, which include financing, commission, ECF and management fee
income increased from $3.6 million in 1996 to $5.5 million in 1997. In August
1996 the Rose Hills ECF changed its investment strategy by increasing the
percentage of fund assets invested in fixed income securities, increasing
earnings available to the Cemetery. ECF earnings increased by $1.2 million and
commission and finance income increased $.1 million

Amortization and interest expense increased $2.4 million and $11.0 million,
respectively, for the nine months ended September 30, 1997 compared to September
30, 1996.  Amortization, which includes amortization of goodwill and covenants
not to compete, and interest expense increased as a result of the Acquisition
Transaction.

Income from operations increased to $11.7 million for the nine months ended
September 30, 1997 from $6.7 million for the nine months ended September 30,
1996.  EBITDA, earnings before interest, taxes, depreciation and amortization
(including cemetery property amortization included in cost of sales), increased
to $18.3 million for the nine months ended September 30, 1997 from $12.7 million
for the nine months ended September 30, 1996.   Both the increase in income from
operations of $5.0 million and EBITDA of $5.6 million were primarily a result of
(i) an increase in pre-need contract sales (ii) an increase in leverage of
existing corporate

                                      (7)
<PAGE>
 
overhead and (iii) the addition of the Satellite Properties. EBITDA should not
be considered in isolation, as a substitute for net income or cash flow data
prepared in accordance with generally accepted accounting principles or as a
measure of a company's profitability or liquidity.

LIQUIDITY AND CAPITAL RESOURCES

The primary source of cash for the Company is funds provided by operating income
and proceeds from long-term indebtedness.  As of September 30, 1997 the Company
had net working capital of $5.6 million and a current ratio of 1.48 compared to
net working capital of $5.7 million and current ratio of 1.37 at December 31,
1996.

Net cash used in operating activities was $1.5 million for the nine months ended
September 30, 1997, compared to net cash provided by operating activities of
$7.0 million for the same period in 1996.  The net change in working capital
provided by operations of $9.3 million compared to 1996 is due largely to the
$7.3 million increase in cash interest expense.  Other factors contributing to
the change include a $2.7 million increase in customer contracts receivable used
to finance pre-need cemetery and merchandise sales.  A reduction in accounts
payable and accrued expenses primarily associated with the Acquisition
Transaction also used $3.2 million of operating flow.

The primary uses of cash will be principal payments on outstanding long-term
indebtedness and capital expenditures as permitted under the terms of bank
agreements.  The Company estimates its current year capital expenditures of
approximately $3.0 million will be used primarily for the repair and improvement
of existing infrastructure and cemetery grounds, as well as the addition of
rolling stock.

Contemporaneously with the consummation of the Acquisition, the Company entered
into senior secured amortization extended term loan facilities (the "Bank Term
Facility") in an aggregate principal amount of $75 million, the proceeds of
which were used to finance the Acquisition Transaction and related transaction
costs, to pre-fund certain capital expenditures and to refinance existing
indebtedness of the Company, and a senior secured revolving credit facility (the
"Bank Revolving Facility") in an aggregate principal amount of up to $25
million, the proceeds of which are available for general corporate purposes and
a portion of which may be extended (as agreed upon) in the form of swing line
loans or letters of credit for the account of the Company.  In addition, the
Company has the right, subject to certain conditions to performance tests, to
increase the Bank Term Facility by up to $25.0.  The Bank Term Facility and the
Bank Revolving Facility will mature on November 1, 2003.  The Bank Term Facility
is subject to amortization, subject to certain conditions, in semi-annual
installments in the amounts of $1 million in each of the first three years after
the anniversary of the closing date of the Bank Term Facility (the "Bank
Closing"); $3 million in the fourth year after the Bank Closing; $7 million in
the fifth year after the Bank Closing; $9 million in the ninth year after the
Bank Closing and $53 million upon maturity of the Bank Term Facility.  The
Revolving Credit Facility is payable in full at maturity, with no prior
amortization.

All obligations under the Bank Credit Facilities and any interest rate hedging
agreements entered into with the lenders or their affiliates in connection
therewith are unconditionally guaranteed (the "Bank Guarantees") jointly and
severally, Rose Hills Holdings, Corp. and each of the Company's existing and
future domestic subsidiaries (the "Bank Guarantors").  All obligations of the
Company and the Bank Guarantees are secured by first priority security interests
in all existing and future assets (including real property located at Rose Hill
but excluding other real property and vehicles covered by certificates of title)
of the Company and the Bank Guarantors.  In addition, the Bank Credit Facilities
are secured by a first priority security interest in 100% of the capital stock
of the Company and each subsidiary thereof and all intercompany receivables.

In connection with the Acquisition Transaction, the Company also issued $80
million of 9-1/2% Senior Subordinated Notes due 2004, which were exchanged in
September 1997 for $80 million of 9-1/2% Senior Subordinated Notes due 2004 (the
"Notes") that were registered under the Securities Act of 1933.  The Notes
mature on November 15, 2004.  Interest on the Notes is payable semi-annually on
May 15 and November 15 at the annual rate of 9-1/2%. The Notes are redeemable in
cash at the option of the Company, in whole or in part, at any time on or after
November 15, 2000, at prices ranging from 104.75% with annual reductions to 100%
in 2003 plus accrued and unpaid interest, if any, to the redemption date. The
proceeds of the Notes were used, in part, to finance the Acquisition
Transaction.

As a result of the Acquisition Transaction and the application of proceeds
therefrom, the Company's total outstanding indebtedness was approximately $153.0
million as of September 30, 1997.  As of September 30, 1997, the Company also
has $25.0 million of borrowing capacity available under the Bank Revolving
Facility.  Management believes that, based upon current levels of operations and
anticipated growth and the availability under the  Bank Revolving Facility, it
can adequately service its indebtedness.  If the Company cannot generate
sufficient cash flow from operations or borrow under the Bank Revolving Facility
to meet such obligations, the company may be required to take certain actions,
including reducing capital expenditures, restructuring its debt, selling assets
or seeking additional equity in order to avoid an Event of Default.  There can
be no assurance that such actions could be effected or would be effective in
allowing the Company to meet such obligations.

                                     (8) 
<PAGE>
 
The Company and its Subsidiaries are subject to certain restrictive
covenants contained in the indenture to the Notes, including, but not limited
to, covenants imposing limitations on the incurrence of additional indebtedness;
certain payments, including dividends and investments; the creation of liens;
sales of assets and preferred stock; transactions with interested persons;
payment restrictions affecting subsidiaries; sale-leaseback transactions; and
mergers and consolidations.  In addition, the Bank Credit Facilities contain
certain restrictive covenants that, among other things, limit the ability of the
Company and its subsidiaries to dispose of assets, incur additional
indebtedness, prepay other indebtedness (including the Exchange Notes), pay
dividends or make certain restricted payments, create liens on assets, engage in
mergers or acquisitions or enter into leases or transactions with affiliates.
At September 30, 1997 the company was in compliance with the terms of the
indenture and the bank audit facilities.


NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 131, Disclosures about Segments of an
Enterprise and Related Information (SFAS 131).  SFAS 131 establishes standards
for the way public business enterprises are to report information about
operating segments in annual financial statements and requires those enterprises
to report selected information about operating segments in interim financial
reports issued to shareholders.  It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
Statement 131 uses a "management approach" concept as the basis for identifying
reportable segments.

The management approach is based on the way that management organizes the
segments within the enterprise for making operating decisions and assessing
performance.  Consequently, the segments are evident from the structure of the
enterprise's internal organization.  Furthermore, the management approach
facilitates consistent descriptions of an enterprise in its annual report and
various other published information.  It focuses on financial information that
an enterprise's decision makers use to make decisions about the enterprise's
operating matters.

Statement 131 is effective for financial statements for periods beginning after
December 15, 1997.  Earlier application is encouraged.  In the initial year of
application, comparative information for earlier years is to be restated, unless
it is impracticable to do so.  Statement 131 need not be applied to interim
financial statements in the initial year of its application, but comparative
information for interim periods in the initial year of application shall be
reported in financial statements for interim periods in the second year of
application.  Management has not determined the impact of SFAS 131 on its
consolidated financial statements.



                                      (9)
<PAGE>
 
PART II

ITEM 5 - OTHER INFORMATION

Forward-Looking Statements

     Certain statements in this Quarterly Report on Form 10-Q include "forward-
looking statements" as defined in Section 21E of the Securities Exchange Act of
1934.  All statements other than statements of historical facts included herein,
including, without limitation, the statements under Item 7 "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
regarding the Company's financial position, plans to increase revenues, reduce
general and administrative expense and take advantage of synergies, are forward-
looking statements.   Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable; it can give no
assurance that such expectations will prove to be correct.   Important factors
that could cause actual results to differ materially from the Company's
expectations ("Cautionary Statements") are disclosed herein, including, without
limitation, in conjunction with the forward-looking statements included herein.

All subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the Cautionary Statements.

Management Change

On September 10, 1997, Kendall E. Nungesser's employment as Chief Executive
Officer of the Company terminated and the Company appointed Dillis R. Ward as
President and Chief Operating Officer of the Company and Larry Miller as Chief
Executive Officer and Vice Chairman of Company.  Mr. Nungesser was replaced by
Mr. Ward as a director of the company.  In November 1997, Mr. Douglas McKinnon
who had served as Executive Vice President of The Loewen Group, Inc. resigned as
a director.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

The Exhibits, as shown in the "Index of Exhibits", attached hereto as pages  11
and 12, are filed as a part of this Report.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


 



                                   ROSE HILLS COMPANY        
                                                             
                                   /s/ KENTON C. WOODS       
                                   -------------------       
                                                             
                                   Kenton C. Woods           
                                   Chief Financial Officer,  
                                   Secretary and Treasurer    

November 14, 1997



                                      (10)
<PAGE>
 
                                      INDEX OF EXHIBITS

<TABLE>
<CAPTION>
(a)
Exhibit
Number       Description
----------   -----------
<S>          <C>
2.1*         __ Asset Purchase Agreement, dated as of September 19, 1996, by and between and between Rose       
                Hills Memorial Park Association and Tudor Acquisition Corp.  (now known as the                             
                Rose Hills Company).                                                                                       
2.2*         __ Agreement and Plan of Merger, dated as of September 19, 1996, by and among the                             
                Stockholders of Roses, Inc. And Tudor Acquisition Corp. (now known as the Rose                             
                Hills Company).                                                                                            
2.3*         __ Amendment to the Agreement and Plan of Merger dated as of November 18, 1996 by                             
                and among Rose Hills Acquisition Corp. (now known as Rose Hills Company),                                  
                Roses Inc., the Stockholders of Roses Inc., and RH Mortuary Corporation.                                   
3.1*         __ Restated Certificate of Incorporation of Tudor Acquisition Corp. changing its name                         
                to Rose Hills Acquisition Corp.                                                                            
3.2*         __ Certificate of Amendment of Certificate of Incorporation of Rose Hills Acquisition                         
                Corp. changing its name to Rose Hills Company.                                                             
3.3*         __ Amended and Restated By-Laws of Rose Hills Company.                                                        
4.1*         __ Indenture dated as of November 15, 1996 between Rose Hills Acquisition Corp. and                           
                United States Trust Company of New York, as Trustee.                                                       
4.2*         __ Form of 9 1/2% Senior Subordinated Note due 2004 (included in Exhibit 4.1).                                
10.1*        __ Stockholders' Agreement dated as of November 19, 1996 among Rose Hills                                     
                Holdings Corp., Blackstone Capital Partners II Merchant Banking Fund L.P.,                                 
                Blackstone Rose Hills Offshore Capital Partners L.P., Blackstone Family Investment                         
                Partnership II L.P., Roses Delaware, Inc., Loewen Group International, Inc., and RHI                       
                Management Direct L.P.                                                                                     
10.2*        __ Administrative Services Agreement dated as of November 19, 1996 between Rose                               
                Hills Acquisition Corp. (now known as Rose Hills Company), The Loewen Group,                               
                Inc., and Loewen Group International Inc.                                                                  
10.3*        __ Credit Agreement dated as of November 19, 1996 among Rose Hills Company, Rose                              
                Hills Holdings Corp., Goldman, Sachs & Co., as syndication agent and arranging                             
                agent, the financial institutions from time to time parties thereto as lenders and The                     
                Bank of Nova Scotia, as administrative agent for such lenders.                                             
10.4*        __ Put/Call Agreement, dated as of November 19, 1996 among Blackstone Capital                                 
                Partners II Merchant Banking Fund L.P., Blackstone Rose Hills Offshore Capital                             
                Partners L.P., Blackstone Family Investment Partnership II L.P., Roses Delaware,                           
                Inc., Loewen Group International, Inc., The Loewen Group Inc., and RHI                                     
                Management Direct L.P.                                                                                     
10.5**       __ Buddhist Memorial Complex Development and Use Agreement dated as of March 1,                               
                1994 between Rose Hills Memorial Park Association and International Buddhist                               
                Progress Society.                                                                                          
10.6**       __ First Amendment to Buddhist Memorial Complex Development and Use Agreement,                                
                dated as of September 1, 1994 between Rose Hills Memorial Park Association and                              
                International Buddhist Progress Society.
</TABLE>  
(b)  Reports on Form 8-K

     None
__
  *Incorporated by reference to the Exhibits to the Company's Registration
   Statement on Form S-4 (Registration No. 333-21411).
 **Incorporated by reference to the Exhibits to the Company's Registration
   Statement on Form S-4 (Registration No. 333-21411 Amendment No. 1).
***Filed Herewith.

<PAGE>
 
<TABLE>
<CAPTION>
Exhibit
Number       Description
----------   -----------
<S>          <C>
10.7**       __ Second Amendment to Buddhist Memorial Complex Development and Use
                Agreement, dated as of March 15, 1995 between Rose Hills Memorial Park
                Association and International Buddhist Progress Society.
10.8**       __ Third Amendment to Buddhist Memorial Complex Development and Use
                Agreement, dated as of May 15, 1995 between Rose Hills Memorial Park
                Association and International Buddhist Progress Society.
10.9**       __ Fourth Amendment to Buddhist Memorial Complex Development and Use
                Agreement, dated as of October 15, 1995 between Rose Hills Memorial Park
                Association and International Buddhist Progress Society.
10.10**      __ Memorandum of Understanding, dated as of March 22, 1996 between Rose Hills
                Memorial Park Association and International Buddhist Progress Society.
10.11**      __ Amended and Restated Employment Agreement     , 1996 by and dated December
                between Rose Hills Company and Kendall E. Nungesser.
10.12**      __ Employment Agreement dated November 19, 1996 by and between RH Mortuary
                Corporation and Dennis C. Poulsen.
10.13**      __ Employment Confirmation dated November 18, 1996 by and between Rose Hills
                Company and Mark Helmintoller.
10.14**      __ Employment Letter Agreement, dated April 22, 1997 by and between Rose Hills
                Company and Kenton C. Woods.
10.15**      __ Addendum to Employment Letter Agreement, dated April 28, 1997 by and between
                Rose Hills Company and Kenton C. Woods.
10.16**      __ Non-Competition Agreement dated as of November 19, 1996, between RH Mortuary
                Corporation and Kendall E. Nungesser.
10.17**      __ Non-Competition Agreement dated as of November 19, 1996 between RH Mortuary
                Corporation and Dennis C. Poulsen.
10.18**      __ Non-Competition Agreement dated as of November 19, 1996 between RH Mortuary
                Corporation and Sandy V. Durko.
12***        __ Computation of Ratio of Earnings to Fixed Charges.
21*          __ Subsidiaries of Rose Hills Company (formerly known as Rose Hills Acquisition
                Corp.).
27***        __ Financial Data Schedule
</TABLE> 

________________
  *Incorporated by reference to the Exhibits to the Company's Registration
   Statement on Form S-4 (Registration No. 333-21411).
 **Incorporated by reference to the Exhibits to the Company's Registration
   Statement on Form S-4 (Registration No. 333-21411 Amendment No. 1).
***Filed Herewith.